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GHANA BAR REPORT 1994 -95 VOL 2

 

Duncan-Williams v Krapah and another [1994 - 95] 2 G B R 887 – 893  CA

COURT OF APPEAL

LUTTERODT, FORSTER, SAPONG, JJA

22 JUNE 1995

 

 

Administrative law – Statutory corporation – Natural justice – Whether statutory corporation obliged to observe rules of natural justice in the course of its business – State Houses (Allocation Policy and Implementation) Commission Law 1984 (PNDCL 83).

The plaintiff and the 1st defendant were tenants of the 2nd defendant, a statutory corporation, occupying two rooms each in the property in issue when the corporation sold the premises to the plaintiff. The 1st defendant resisted the plaintiff’s attempt to recover the premises and the plaintiff instituted an action in the High Court for a declaration that she was the sole lessee of the premises. The trial judge found for the defendants and the plaintiff appealed on the ground inter alia that the allocation of the disputed property to the plaintiff by the 2nd defendant corporation was in violation of the rules of natural justice as persons who would be affected by the allocation were not granted a hearing by the 2nd defendant corporation. Counsel contended further that the sale was in violation of State Houses (Allocation Policy and Implementation) Commission Law 1984 (PNDCL 83) as the disputed premises comprised two separate units numbered 181A and 181B.

Held: (1) It was an elementary principle of law that the rules of natural justice applied only to a body having legal authority to determine questions affecting the rights of others and having the duty to act judicially. The appellant had not shown that the respondent had a legal duty to determine questions affecting the rights of persons or act judicially. The sale transaction by the 2nd defendant was administrative, not judicial or quasi judicial act. The 2nd defendant had the discretion to decide to whom it would sell its property. The ground of appeal thus failed.

(2) PNDCL 83 provided that no person should acquire or own two houses constructed or provided by any State agency, without reasonable justification. The record showed that the disputed property was one, not two houses. Accordingly PNDCL 83 was inapplicable.

APPEAL against the judgment of the High Court to the Court of Appeal.

Gollo for the appellants.

I R Quansah for the respondent.

LUTTERODT JA. House No 181, Kwadaso, a four-room premises, is the property of the 2nd defendant, the State Housing Corporation. The parties were at one point in time or the other tenants of the corporation, with each occupying two rooms in the said property. The plaintiff-respondent (to be hereinafter known as the “respondent”) claims that her tenancy of the portion she occupies which is described as 181B, commenced on 8 December 1962, while the defendant-appellant (to be described hereinafter as “appellant”) was a tenant of No 181A from October 1970.

In February 1981, the landlord, the corporation sold the premises to the respondent and evidenced same by a lease agreement made on 26 March 1985. When her attempts to dispossess the appellant, to enable her put her children in occupation failed, she instituted an action in the High Court for a number of reliefs, the principal one being: “A declaration that plaintiff is the sole lessee of estate house No 181.”

Not satisfied with the circumstances under which the entire premises came to be sold to the respondent, the appellant not only filed a defence alleging fraud, but counterclaimed inter alia for “a declaration that the purported sale of house No 181A and the consequent lease made thereon was null and void on the ground of fraud.”

The trial judge found in favour of the respondent, prompting the appellant to lodge this appeal against the decision on a number of grounds. Ground 4 of the additional grounds of appeal reads:

“That the 2nd defendants by allocating Kwadaso Estate House No 181A to the 1st defendant as evidenced by their letter of 9 October 1970 (exhibit 2) and without just cause selling the same house to plaintiff respondent having regard to their letter of 17 October 1977 (exhibit 3) acted wrongfully, contrary to State Houses (Allocation Policy and Implementation) Commission Law 1984 (PNDCL 83).”

It was submitted with respect to this ground of appeal that the premises in dispute was made up of two units – 181A and 181B; and consequently the sale of both units to the respondent amounted to a sale of two houses, an act which was clearly forbidden under the provisions of the State Houses (Allocation Policy and Implementation) Commission Law 1984 (PNDCL 83). Counsel’s contention then is that the combined effect of sections 3 and 7 of the above Law completely nullifies the sale and the same ought to be set aside. Counsel for the respondents answered the submission simply that the premises in question comprised only one, not two houses, and consequently s 3(1) of PNDCL 83 did not avail the appellants.

It is not disputed that at the time of the sale, the premises were made up of two units, 181A and 181B. The question raised by these arguments is whether the property sold by the corporation to the respondent comprised of two houses or one house. I have no doubt in my mind that only one house was sold and consequently as counsel for the respondent has rightly argued, the provisions of PNDCL 83 have not been violated in any way. Why do I say what was sold her was only one house? The burden no doubt rested on the appellant who asserted to lead evidence in support of the fact that two houses were sold to the respondent. Her evidence in chief however belies that fact. She deposed as follows:

 “Sometime ago I forwarded an application to the State Housing Corporation for the purchase of the one half portion of the house which I occupied.

This evidence clearly shows that there was one house, which has been apportioned into two. The reply to her application, which she tendered as exhibit 3 confirms that 181 is only one house, albeit it being shared by two families. It will be worthwhile reproducing the body of that letter it reads:

“We refer to your letter dated 23 September 1977, and note that the house is being shared by you and another family. We therefore anticipate a number of problems cropping up. Under the circumstances we find it difficult to sell yours to you.”

This fact, namely that 181 was being shared by two families was reiterated by the appellant’s counsel himself as he sets forth the appellants case during his cross-examination of the 2nd defendants witness. The answer given strengthened the appellants. I reproduce both question and answer.

“Q. Are you aware that your corporation refused to accept the application by 1st defendant for lease in respect of the portion of the house she occupied because the corporation felt that, if done would create problems since the house is shared by two families.

A. Yes.”

Finally we look at the exhibit A evidencing the sale, and we find only one property described as 181 as the only property involved. The schedule likewise describes only one property measuring 125 ´ 70. In my view then the sale does not offend any provision, express or implied of PNDCL 83, and the same cannot be described as wrongful, thereby necessitating it being set aside. The appeal on this ground must fail.

It was next submitted with respect to ground (1) that the sale to the respondent was in violation of the rules of natural justice namely the audi alteram partem rule. The argument was that public corporations whose actions are bound to affect others must give those parties a hearing.

For the appellant therefore it was urged that since the corporation, a statutory body, was taking administrative steps to dispose of the property, the failure to give the appellant a hearing amounted to a breach of the rules of natural justice. Furthermore, that their conduct was wholly fraudulent and the sale consequently ought to be set aside.

It is an elementary principle of law that the rules of natural justice would only apply to a body having legal authority to determine questions affecting the rights of others and having the duty to act judicially.

As between the parties to this appeal, the appellant has not shown that the respondent has any legal duty or authority to determine questions affecting the rights of others, let alone the duty to act judicially. Secondly on counsel’s own showing the pre-sale actions taken by the corporation were all administrative (not judicial or quasi judicial) steps. The corporation in that capacity was to exercise its discretion as to whom it should sell its property. It has not been shown that the respondents had the duty to act judicially and they were thus not obliged to observe the rules of natural justice. Accordingly the appeal on this ground must also fail.

Finally, I find no fraud proved from the circumstances of this case. In my opinion, depriving a co-tenant of a shelter is against social justice and the policy of governmental bodies would not constitute fraud. In any case I have found no government policy has been ignored, breached or violated in any way. In the circumstances, I do not think we should disturb the learned trial judge’s decision. I would dismiss the appeal.

SAPONG JA. In this appeal the 1st defendant is saying that she and plaintiff are all staying in house No 181, Kwadaso, Kumasi, numbered as 181A and 181B. They are staying in this house as tenants of State Housing Corporation. State Housing Corporation is the 2nd defendant.

Then in 1985, the 2nd defendant leased house No 181 to the plaintiff for 99 years and the plaintiff took steps in the circuit court to eject the 1st defendant and also to claim damages from her for trespass and a declaration that the plaintiff was the sole lessee of the estate house No 181 Kwadaso, Kumasi.

The defendant-appellant resisted this claim of the plaintiff-respondent at the Circuit Court, Kumasi and lost and so has appealed to this court for the judgment, costs and all orders against her to be set aside.

Learned counsel for the appellant tried to impress upon this court that No 181 consists of two separate unit houses, viz 181A and 181B and therefore the State Housing Corporation leasing the two unit houses to the plaintiff had sinned against PNDCL 83 of 1984. This law forbids one person to own two houses belonging to State Housing Corporation unless reasonable justification has been shown; section 7 thereof made PNDCL 83 retrospective. It says before the commencement of the Law no person shall acquire or own two houses constructed or provided by any State agency, without reasonable justification. The house in question was built by the State Housing Corporation. This fact is not in doubt. The State Housing Corporation regards this house as one house and not two houses. The lease was exhibit A which was tendered in the court below, puts the point beyond doubt that the house is one and not two. That being so I do say that PNDCL 83 is inapplicable. Therefore I am not in the least surprised that learned counsel for the plaintiff-respondent says emphatically that PNDCL 83 is inapplicable.

Learned counsel for the appellant says further that State Housing Corporation is a public corporation. It has the right to sell or not to sell. That being so persons that might be affected in the event of a sale have to be heard.

The plaintiff-respondent was occupying half of the house and the defendant-appellant was also occupying the other half of the house. So it is contended that the parties should have been heard before the sale of the said house. The State Housing Corporation did not hear them in the sale and so the sale should be faulted.

I do not share this view. The landlord of 181, Kwadaso Kumasi is


 

State Housing Corporation. It can decide to sell to any of the two tenants or to an outsider simpliciter. The evidence on record is so weighty that, I do not think the judgment should be disturbed.

I dismiss the appeal.

FORSTER JA. I agree.

Appeal dismissed.

S Kwami Tetteh, Legal Practitioner
 
 

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